FHA

BB&T – Branch Banking and Trust Company is a rather small lender. This particular loan was an FHA loan, which has its advantages to the short sale seller.

We submitted the short sale packet as the property went on market. It took over two months for BB&T to take real action on the file, which happened to coincide with the time we secured a strong cash buyer for the home.  

To our surprise - the short sale approval arrived just over a week later, and shortly after we closed.

OWED: $200,000

APPROVED AND CLOSED WITH FULL DEBT FORGIVENESS: $83,000

FHA SELLER INCENTIVE: $1,000

TOTAL TIMEFRAME LIST TO CLOSE: 3 MONTHS

A happy ending to a long story….BUT….what I don’t quite understand is why Wells Fargo and GMAC can process their FHA short sales through Equator (a fast and efficient online platform), yet Bank of America still requires all FHA short sales to be processed  manually.

A regular Bank of America short sale processed through Equator will generally take about 3-6 weeks….BUT this FHA MANUALLY PROCESSED short sale with Bank of America took a whopping 6 months to make it through the system.

Why BofA? It doesn’t need to be this way.

There wasn’t even any good reason the short sale took 6 months to get approved…forcing sellers through endless qualifying, repeatedly losing paperwork and unresponsive negotiators are the only reasons this short…

Yesterday I met with a Connecticut couple considering a short sale. Like most other short sales I have been involved with lately, this loan is an FHA loan. Now, I have not done an official study on the actual rates of FHA default, but as a CT short sale agent, it is very apparent to me that the FHA is becoming inundated with delinquent loans, short sales and likely foreclosures as well.

A year or two ago I would rarely have an FHA short sale in the mix…but nowadays more than half of the new short sales I take on involve an FHA mortgage.

Furthermore, it seems FHA short sales are taking longer to get approved, and just recently it seems the FHA has taken a stance of “deny as many as possible” as I’ve also experienced a lot…

Are you considering or involved in a short sale in Greater Hartford/Eastern Connecticut? Wondering what it will take to buy a new house again one day?

Guidelines for post short sale borrowers are getting better all the time. Assuming you have taken other measures to improve your credit post short sale, gaining new financing is very possible after just a few years. 

A Fannie Mae mortgage will be available to you two years after your short sale, assuming you qualify otherwise. In fact, if you managed to not miss any payments prior to your short sale, you can get new financing immediately.

The FHA will also lend to you immediately after a short sale with no missed payments, or three years later if you were in default at the time of the short…

The client called me in August. Less than two years ago she relocated to CT for a lucrative position and bought a home. All was well until earlier this year when she got laid off. After a period of time on unemployment she found another position, for a fraction of the pay and several hours away. Her only choice is to relocate and the home which she had bought for $190k in 2008, is now worth about $130k.

I do write quite a bit about strategic default, however; for the record I would like to state that the great majority of people…